Presented below are the 2018 income statement and comparative balance sheets for

Question

Presented below are the 2018 income statement and comparative balance sheets for Santana Industries. SANTANA INDUSTRIES Income Statement For the Year Ended December 31, 2018 Sales revenue Service revenue 14,450 3,600 Total revenue 18,050 Operating expenses: Cost of goods sold Selling General and administrative 7,300 2,500 1,600 Total operating expenses Operating income Interest expense Income before income taxes Income tax expense Net income 11,400 6,650 210 6,440 2.600 $ 3,840 Dec: 31, Dec. 31 lance Sheet Information (s in thousands) Assets Cash Accounts receivable Inventory Prepaid rent Plant and equipment 2018 2017 s 7,450 2,290 2,700 2,300 4,200 3,100 320 14.700 12,200 160

Explanation / Answer

Cash flow statement: Cash flow from operating activities: Net income for the year 3840 Adjustment required for reconciliation: Depreciation 1700 Increase in Accounts receivable -400 Increase in Inventory -1100 Decrease in Prepaid expense 160 Increase in Accounts payable 400 Increase in Interest payable 110 Increase in Deferrred service revenue 210 Decrease in Income tax payable -260 Net cash provided from Operating activities 4660 Cashflows from Investing activities: Sale of plant 600 Equipment purchased -4200 Net cash used in investing activities -3600 Cashflows from Financing activities: Borrowings from loans 5200 Dividend paid -1100 Net cash provided from financing activities 4100 Net increase in cash 5160 Add: beginning Balance of cash 2290 Ending balance of cash 7450

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